language and that the message may have gotten mixed up during that translation. thank you so much for watching "state of the union." i'm cannily crowley in washington. head to krn -- cnn.com for analysis and extras. and if you missed any part of today's show, you can find us on itunes. next, "fareed zakaria gps" with guest bill clinton. this is gps, the global public square. welcome to all of you in the united states and around the world. i'm fareed zakaria. we have a blockbuster show for you today. for much of the show we have an extended conversation with president bill clinton. we'll talk about the presidential race, iran ice nuclear ambitions, the u.s. economy, the jobs problem and much more. then the author who lived under a death sentence for iran's ayatollah khomeini. for a decade.

who better to talk about the current strife. also, romney and obama seem to agree on outsourcing. they both hate it, but actually they should both embrace it. i'll tell you why. but first here's my take. over the last week as we watched rage and protest in the muslim world, people have asked why it's happening and because we're in a campaign season, that question has become a political one. some republicans say it is president obama's policies that have produced this atmosphere. he has projected weakness, offered olive branches, and been naive. but think about it. had president obama kept 100,000 troops occupying iraq, would that have made people in the middle east happier with america? had he given a more combative speech three years ago, would that have made radical islamists stay at home last week? the truth is, president obama nor any american president has much to do with t outbreak of protests over the last two weeks. it might be instructive to recall that after the 9/11

attacks, many asked the question why is there so much anger in the arab world, why do they hate us, and many serious scholars and journalists, myself included, have wrote extensively about the stagnation and repression in arab countries that produced bitterness over their country and anger in the west. the u.n.'s arab development report looked at the region's backwardness. please understand most of those conditions, illiteracy, female sub jog agency, still exists. these are longstanding trends that have caused in me muslims a sense of humiliation and rage. they're not a response to some specific speech or even a particular president. does anyone think ronald reagan's policies caused the death threats with salman rushdie? does anyone think any of what

president bush had anything to do with the cartoons of prophet muhammad. for example, our decades-long support for dictators and monarchs, our policies toward the palestinians, our concerns about oil supplies, but the frustration being unleashed on the region today is a response to much longer term trends. some of it is a result of powerful internal political struggles that have begun in arab countries between moderates and radicals as they vie for power in new and fragile democracies. there is a kind of bipartisan arrogance that's often at work in washington where both sides believe that everything happens in the world is a consequence of american policy. if only we had implemented a different speech or made a different policy or sent out a different tweet. the truth is what's happening in the arab world is not about us. it really is about them. for more you can read it online.

in "time" magazine or on time.com. let's get started. ♪ president clinton, thank you for joining us. >> glad to do it for you. >> i can't not ask you about politics. do you think what mitt romney said about the 47% had an element of truth? do you think there is a problem that a growing number of americans are dependent on various forms of government subsidies or benefits in various ways? >> no. do i think there are some americans who are trapped in a cycle of dependency? yes, i think that is a problem. that's why i supported welfare reform to change it from an entitlement system to a work-based system, to an empowerment system. but the money we spend, it's not out of line with other advanced

countries. in fact, we spend a smaller percent of our gdp than almost any other country. and the 47%, those that are adults, they do pay taxes. they pay social security taxes, they pay medicare taxes. they pay state and local taxes. i saw a graph just today which basically said if you break us down into quintiles, 20%, 20%, a 20%, then you break it down into 10%, 5%, 4%, 1%, we actually wound up paying pretty much in proportion to the amount of income that that group takes out of america every year. so i think that's overstated. we should always be trying to promote empowerment over dependency, but the american people can easily be misled may be too strong a word but

confused now because whenever you have a recession this deep, spending goes up on things like unemployment, food stamps, and medicaid for health care. and revenues drop because people aren't making as much money. a lot of those people who don't pay ordinary income tax would love to be back paying ordinary income tax. they'd love to have a full-time job instead of a part-time job or any job at all or being able to get a pay raise. as this economy begins to improve, those numbers will go down some simply because their income will go up and they'll go back into tax brackets again. >> do you think this is a game-changer for romney? >> i think it puts a heavier burden on him in the debates to talk about what he meant. i do think a lot of the tea partiers think that, government versus the private sector. the problem with their paradigm as i said many times, if you look at every successful

economy, if you measure the economy by per capita income, declining inequality, increasing social mobility, your chance of getting a pay raise year in and year out and you're doing better than your parents, there is no evidence that anywhere that's going on -- and it is going on -- that they have a weak government and even lower taxes than we do. of the 33 countries in the biggest economies in the organization for economic cooperation development, richer countries, we rank 31st in the percentage of our income we devote to taxes, so their theory doesn't work. if you had a government-centered economy, it would fail. market economics works better, are limits on destruction and it works better when people can succeed in it through training and education program and having a decent health care system. >> if you look at the numbers, obama is leading in pretty much all the swing states.

and if you've seen the polls, you know that's accurate. and that could lead to a electoral landslide. do you think that's possible. >> it's possible. but we still don't know who's got a vote. he won and enormous victory of people under 30. they're going to be frustrated. i think for all kinds of reasons they're unlikely to vote in large numbers for governor romney. but will they vote. how much will the vote be lessened and reduced by the fact that in florida where in four counties, the pre-election voting, advanced voting has been cut down to eight days and doesn't include the sunday before the election which is an arrow aimed straight at the heart of the african-american churches who pull up the church buses on the sunday before election and take

elderly people who have no cars or people that are disabled to the polls so they can vote, how much will those things work in ohio where the legislature and governor eliminated advanced voting, unless the election council voted for it. and the three democratic commissioners because they're not hypocrites voted with the republicans. in cleveland, the three republican commissioners voted against the democrats so they can't have advanced voting. how much is all of that going to affect the turnout. in my lifetime, nobody's ever done anything quite this blatant. so i think you have to assume it's going to be a close race, asuperintendent -- assume it is a hard fight and fight through it and then win the fight. he had a very good convention. he got a good boost out of it. i think get that we were so damaged that we couldn't be back to full health in four years.

the real question is who's got the better plan for the future. i think he'll win that argument. in your last book how to create jobs, one of the things that struck me was you really were quite passionate about the importance of ending a 30 year battle against government, what you call a 30-year assault on government. why do you think that's key to growing jobs in america? >> because there isn't a successful country in the world that doesn't have public, private cooperation. you look at the countries, germany, which gets the highest gdp from manufacturing and the rich countries get their highest ones from exports. after the financial crisis, they did the best in terms of penetrating the chinese market again. why? because they have a system supported by the government to

small and medium manufacturers back into the foreign markets. look at singapore, a country the republicans are impressed with because they have a tax burden that's low. they don't have social security obligations, for example. overall. they spent $3 billion, a country with 5 million people, spent $3 billion to try to take the lead away from the united states over biotechnology. that was government money but they're not going to create government jobs, they're creating private sector jobs for researchers and new drug companies and new medical device companies, so what works out there is a high level of cooperation, not this kind of constant conflict and treating the government like everything they do hurts the private sector. what's one of the biggest problems we have in america

today? we have lots of open jobs for people in the stem field, science, technology, engineering, mathematics. where are they going to come from? they're going to come from our universities and students, many of whom had to have loans to get out of college. different countries may do health care slightly differently. the netherlands is doing well that. i have a 100% private system, individual mandate but there are government subsidies to the people who couldn't otherwise afford the individual mandate. you can't find a successful country that is not organized around a cooperation model. president clinton is passionate about jobs and we are, too. tonight at 8:00 and 11:00 p.m. you can catch a brand-new gps special, global lessons, putting

america to work. we look around the world to figure out how to create jobs back home in america. don't miss it. but up next, president clinton on iran, peace in the middle east, and his optimism about the war. [ male announcer ] citi turns 200 this year. in that time there've been some good days. and some difficult ones. but, through it all, we've persevered, supporting some of the biggest ideas in modern history. so why should our anniversary matter to you? because for 200 years, we've been helping ideas move from ambition to achievement. and the next great idea could be yours. ♪ as part of a heart healthy diet. that's true.

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president clinton, i'm going to ask you a few questions about foreign policy. do you think benjamin netanyahu is right, that the united states needs to draw a clearer red line with iran with regard to its nuclear capabilities? >> well, because i was president and because my wife is secretary of state, i have to be very careful what i say about this. but what i know is that the idea that they're not working together is inaccurate. i know that the president and the prime minister talk all the time. i know what hillary's doing. i know that the security services work together. and i think this is the most difficult of all questions, how to handle this. there is no easy answer. if we are -- if -- with all the scenarios for military action have huge collateral costs,

which you yourself have noted your columns and that explains why a substantial number of the distinguished israeli military and intelligence officials have said they don't think an attack is warranted. i also thing it's different what you say to countries in public versus what you say in private. and so i think the president's desire to keep his public options open is the correct course at this time. i think when you say something in public, whatever it is, one or two things happen. when the people call you on what you said, you've either got to do something about it and deal with perhaps unintended negative consequences or you don't and people think you're weaker. better to have them wonder what you're going to do and communicate privately in more explicit terms.

>> is mitt romney right that the only thing you can do with the palestinian issue is kick the can down the road? >> no. it is accurate that the united states cannot make peace between the israelis and the palestinians. they have to do that. what we need to do is maximize the attractiveness of doing it and minimize the risks of doing it. we can do that. and if you look at it, president bush, when he took office -- the second president bush -- i'll never forget. he said, you know the names of every street in the old city and look where it got you. i'm not going to fool with this now. immediately the death rate went up among israelis and palestinians because there was nothing going on. then he got aggressively involved.

condi rice practically lived on an airplane going back and forth to the middle east and new possibilities opened up. they devised a negotiation around this roadmap concept. they didn't make peace, but meanwhile the palestinian government was more stable, they produced more prosperity. when the israelis took action against gaza and hamas, the west bank was calm all because things were happening, and there was an understanding, a level of trust. so i think kicking the can down the road is an error. i also think that with all foreign policy conflicts, i like to say there's -- you've got to decide whether a foreign policy problem is a scab on your knee after you fall down or an abscessed tooth. with the scab you want to let it alone. it will cure itself,if you'll just let it alone. time passing is good. with an abscessed tooth, all you're going to do is become

sick and more infected if you don't deal with it. so i have always believed that because of the demographic changes in the middle east, generally among the palestinians and in israel, you have israelis coming from other countries who are more disconnected to the history of the idea of a shared future that sooner is almost always better than later, and i still think that. and i believe that there'll be a new opportunity next year to reach an accommodation. i don't know when we're ever going to have a better palestinian government to deal with than the one we have in the west bank. the hamas problem is the hamas' problem. but i think the united states should be involved. we should always try to maximize the peace agreement, minimize

the risk and do concrete things that gives some hope to people. >> we'll be back with more of my conversation with bill clinton, but up next, what in the world. there's a new dirty word in american politics. outsourcing. but the facts show it's not so dirty after all. right back. tdd#: 1-800-345-2550 let's talk about that 401(k) you picked up back in the '80s. tdd#: 1-800-345-2550 like a lot of things, the market has changed, tdd#: 1-800-345-2550 and your plans probably have too. tdd#: 1-800-345-2550 at charles schwab, we'll give you personalized recommendations tdd#: 1-800-345-2550 on how to reinvest that old 401(k). tdd#: 1-800-345-2550 so talk to chuck tdd#: 1-800-345-2550 and bring your old 401(k) into the 21st century. tdd#: 1-800-345-2550 rollover your 401(k) or ira and receive up to $600. tdd#: 1-800-345-2550 see schwab.com for terms and conditions.

now for our "what in the world" segment. there's one issue which mitt romney and barack obama are in agreement. outsourcing. >> we do not need an outsourcing pioneer in the oval office. we need a president who will fight for american jobs. >> if there's an outsourcing chief, it's the president of the united states, not at the guy who's running to replace him. >> every week politicians on both sides of the aisle bad mouth outsourcing. hang on. what's so bad about outsourcing? let's look at the facts. a common misconception about outsourcing is it is a zero-sum gain. by that we mean when the job is

moved to china we tend to read the score as china, plus one, america, minus one. but a recent study from london center of economic performance reviewed 58 american industries between 2000 and 2007. it found instead of limiting jobs for americans, immigration and offshoring actually improved the domestic job market. you can understand why. if a company can lower its costs by outsourcing, it is likely to survive and flourish and thus eventually hire more workers in america. outsourcing is actually a fancy word for a simple ancient idea. people should specialize at what they do best. adam smith described it as far back as 1776. he wrote in "the wealth of nations" if a foreign country can supply us with a commodity cheaper than we ourselves can

make it, better buy it of them. the concept dates even further back, perhaps back to the first rudimentary marketplace. buyers will always look for the best deal on the market. the difference today is the market is highly global competitive space, so for a company to survive, it needs to seek out the best place to make its goods and hundreds of millions of consumers benefit. they get cheap goods and services. everything from iphones to airline tickets would be a lot more expensive if not for outsourcing. the u.s. doesn't ship jobs out to china and india because labor is cheaper, they do it to gain more of the market. they buy more of the products and services and they invest their capital in the united states. [ chanting ] >> when the north american free trade agreement was being implemented in 1994, many feared the deal would result in hundreds of thousands, millions of lost american jobs.

people thought cheaper mexican goods would replace american made products. but all those years later, it shows that nafta's negligence on jobs was negligible. instead, nafta helped the mexican and american economies expand. now, outsourcing and trade can be misused. companies need to recognize that american workers, high-grade workers can produce efficiently as they do in germany for example. but the reality is as a concept, outsourcing is not only useful, it's inevitable. it's never easy to see a job move from one country to another. but jobs are lost by automation, too. does that make progress bad? the answer isn't to criticize outsourcing. instead, we need to find ways to build on its advantages, by being negative about a pretty standard and age old global

practice, both political parties are lacking real ideas. what we need is a smart debate about how to create jobs, which you will find on the premiere of our special tonight "global lessons: putting america to work." tune in at 8:00 p.m. and then at 11:30. up next, back to my formal conversation with former president bill clinton. [ male announcer ] citi turns 200 this year. in that time there've been some good days. and some difficult ones. but, through it all, we've persevered, supporting some of the biggest ideas in modern history. so why should our anniversary matter to you? because for 200 years, we've been helping ideas move from ambition to achievement. and the next great idea could be yours.

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find your co-pay at myflexpen.com. ...and we inspected his brakes for free. -free is good. -free is very good. [ male announcer ] now get 50% off brake pads and shoes at meineke. the clinton global initiative starts today. you've got 50-odd members coming. mini u.n. before the u.n. begins. what are you hoping to accomplish? >> well, first i think it's important that this year we're focusing much more rigorously on how to do these things everybody wants to do. the design for impact sounds

like a disembodied slogan, but what it really means is if you think about every objective you want to achieve before you build a building, set up a supply route, start a social program, it makes a big difference. in the opening session, we're going to have some heads of state and the secretary-general of the u.n., head of the world bank, but mike duke, the president of walmart is going to be there because walmart is the number one producer of solar power of all the corporations in america. they even have wind mills at a couple of their stores. they think this is a good investment, so they're glad they're on the cutting edge of the fight against climate change, but they think it will save them money, save their customers money, create more jobs, and they designed it from the beginning. they planned in the beginning to do this. so that's what we're going to emphasize.

then, of course, we have some very exciting potentially political developments because of the leaders of egypt and libya are coming. >> you have a cover story on "time" magazine. you are the cover story of "time" magazine. it's called "a case for optimism." most americans are going to look at the situation therein and think, you know, everyone tells them it's the weakest recovery since the great depression. why are you optimistic? >> well, first of all, the recovery is slow because the damage was global and deep. and unemployment here is lower than it was in the eurozone. job creation is better here than it is in the uk. for all the problems, i think we're moving in the right direction. i think it takes a long time to get over one of these financial crashes, but i think if you look around the world, if you look the -- just how the spread of elementary technology is generating wealth and

opportunities, haiti, where i do a lot of work, digicel has allowed the cell phone owners in haiti to do banking over the cell phone because the banking system doesn't work for them. that's creating wealth and facilitating movement of money in a way that produces productivity. it makes a huge difference. all over the world wherever you increase cell phone penetration by 10% in a developing country, it increases gdp output by 0.6%. i think if you look at impact technology, what one laptop for a child movement can mean for bringing world-class education materials to children who otherwise would have had to wait decades to get that kind of support, what it might even mean for poor schools in america, you have to be optimistic about it.

>> you have approval ratings right now that are the highest since you left the presidency, basically the highest of almost any former president. you went through some rough times in your presidency. at the lows did you think you'd get back to being this high? >> you know, i never -- i didn't thing about it that much. my belief is you decide what you should do in life and you put one foot in front of the other and after you take enough steps something good happens. but in general all former presidents see their approval rating go up because they're out of the line of fire, they don't threaten anybody else's ambitions, they don't thwart anybody else plans and if they're doing what i think they should do for america, they're out there doing good things and

their numbers go up. in general that's what happens. i'm touched by it. i'm gratified by it. i love my country. i love what i'm doing now. but i think a lot of it is just being out of the line of fire and trying to do good things. i also believe -- >> are you amused by all these republicans who say they love you when they once were trying to impeach you? >> yeah. it's interesting. way before that, just the stuff that went on, but they remember, too, that we actually did things. but they didn't ask for surrender once they realized there would be no surrender. there was an action-forcing event where the government was shut down, we had about a year that was lost to action and then the public rendered a judgment. they thought i was right on that, not to give in to the pressure, so we began to work together, we had five good years working together, even through all the

other controversy, we kept getting things done. we really haven't had an action-forcing event like that. i believe the election will be that event. i expect the president to win and i think if he does after this happens, then you will see the log jam beginning to break. i think it will strengthen the hand of, for example, speaker boehner, who would make an agreement if the most right wing of his caucus would let him. i think we'll have to think about the consequences of not doing that. i think the same thing will happen in the senate. i think you will see the gravitational forces on american politics pushing us toward an agreement on the budget and a number of other things. >> so you're an optimist. >> i am. >> president clinton, thank you so much for doing this and all the best wishes to have a very successful clinton global initiative. >> thank you very much. the correct response to a

stupid film on youtube is to say it's a stupid film on youtube and you get on with the rest of your life. so to take that and to deliberately use it to inflame your troops is a political act. it's not about religion. that's about policy. . . . . w. e. r. hmm, it says here that cheerios helps lower cholesterol as part of a heart healthy diet. that's true.

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my next guest knows a thing or two about anger in the muslim world. when salman rushdie released his book "satanic verses," it was met with widespread protests and then an edict to kill him. that was back in 1988. now in 2012 he has a new book out, "joseph anton." a memoir that describes the time he spent under police protection. so when you watch these protests around the world triggered by this movie trailer, does it bring back memories? >> well, it seems to have one important connection.

at the time of the attack on "the satanic versus" what we saw was not so much spontaneous outpouring of rage as a carefully manufactured outpouring, which was very well done. there was no doubt it was highly controlled. there were missives sent out, all identical to make sure everybody was singing from the same song sheet, making the same attack on the books in the same words so you could say it was a political attack whose purpose was the same. they had political gains in mind. >> people don't realize this. i was in india when the "satanic verses" were published and there were lots of demonstrations -- not lots, a couple of demonstrations with a few thousand people. it was impossible that anyone could have read the book at this point. >> that's right. it wasn't in the country. >> it wasn't in the country. >> no.

so these -- i think with hindsight looking back at it, you can see that that was one of the early moments at which this project of manufacturing outrage began, and that's become much more prevalent and much more widespread, and i think certainly if we look at what's happening now, this is very much a product of the outrage machine. yes, there's the stupid film, you know, and the correct response to a stupid film on youtube is to say it's a stupid film on youtube and you get on with the rest of your life. so to take that and to deliberately use it to inflame your troops, you know, is a political act. that's not about religion. that's about power. and that's what's been going on. i think when you have even figures like senior figures in hezbollah announcing to the faithful that this video was manufactured at the behest of u.s. intelligence, you begin to

see the operation and the kind of almost global paranoia, the idea that there is this gigantic conspiracy in the west to defame, degrade islam, you know, and that all these things, whether they're cartoons or videos or whatever, are evidence of that and that this conspiracy is engineered at the highest level. and that plays very well. it plays very well to the arab street. >> why does it? why does it work? >> well, i think it's clearly evidence of a kind of insecurity of culture, you know, because if you're secure in your sense of yourself, in your belief system or whatever it might be, you know, you can shrug off criticisms. you know, there's cartoons about the pope every day in the papers, but you don't have catholics burning down newspaper offices. if you're secure in yourself and

in your ideas, you can shrug things off. so this is partly -- it feels like it's insecurity. the other thing is we've seen again since the time of the satanic verses, something i try to write about in my memoir is the growth of a form of identity politics in which people are encouraged to define their identity through what enrages them. you know, you define yourself by what you hate rather than by what you love. i mean a more normal way of defining yourself is to say these are the people i love to be amongst, this is the place i love, this is the language i love, you know, et cetera. identity is rooted in things like that. but this new form of identity is defined by opposition, you know. i am who i am because i hate that. >> you would have a unique perspective on this. when you look at one of -- this cartoon controversy in france, you will notice that cnn has not aired a video, a clip of it, and

we have not aired the cartoon. are we making right decision, or do you think it is important to show the cartoon? >> you know, it's a news organization. you have to shoot about the news. you can't censor the news because somebody might not like the news. you go down that going to be m show. >> so we should be showing it? >> of course, you should. it seems to me very important that we need to stand our ground here. i think the first amendment is one of the great treasures of western culture and one of the reasons why people like me end up making their lives in america is because of the freedoms enshrined in that. most of the world doesn't have this. so if you happen to be in this bit of the world where we are allowed to say what we think, we should, for goodness sake, use that freedom and not shy away

from it. we should defend it and cherish it. and the problem with freedom is that people will always misuse it because not everybody is a nice guy and not everybody is smart and sophisticated and subtle and talented. some people are just the opposite of that. freedom means freedom for those people, too. so in order to defend the general subject of prfreedom, y have to defend the freedom that you don't like and do things that are ugly and cheap and tawdry, like this video. it's clearly not the work of any merit at all, but it's important that there be freedom without any merit of work as well. that's the simple logic, and i think if we believe in this value of free expression, we just have to hold the line. we just have to say, this is what we do.

>> pleasure to have you. thank you. up next, why good governance for one african country meant getting rid of an entire senate. i'll explain.

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she made her first official visit to washington, d.c. this week. the leader of the burmese opposition who spent 15 days on arrest visited the white house and received the congressional gold medal. while introducing si che, she said she learned a lot of things from american tv. which brings me to my question,

from which aspect of american tv did burmese politicians allegedly learn about democracy? is it a, cspan, b, the west winning, c, veep, or d. it's where you see lots of democracy but not much liberty, which is the theme of the book. the book also as a chapter on american democracy, which i think you'll find very interesting. now for the last look. this week the poor west african nation of senagogue did something to pay off its debt. it got rid of its senate, just axed off a house of parliament in order to pay for much needed in f infrastructural repairs. it got me wondering just for fun, what would happen if we sold off the senate? let's start with three beautiful, big senate office

buildings. by gps's calculations, if we rented out that space at market rate, we would get about $261 million per year. then there's the senate's annual operating budget for everything from pencils to those great oak senate desks, it's about $900 million per year. so in the end we would only save about a billion dollars per year. it sounds like a lot of money but it's only a drop in a bucket. the answer to the question was b, "the west wing" is what a burmese politician told mrs. clinton they used to learn american democracy. mrs. clinton's response? we can do better than that. don't forget their lesson is at 8:00 p.m. and 11:00 p.m.

pacific. don't miss t. thanit. thanks for being part of my program this week. i will see you next week. hi there, i'm susan hendricks with a check of the top stories. both candidates are bracing for a busy week. both are in the battleground states of colorado. and the president will also deliver a speech to the u.n. general assembly. libya's army is building a line in the sand from the militias in tripoli. it follows militian protest, like the one you see here. the army says it will use force, if necessary, to carry out its order. pakistan's prime minister is it condemning a bounty on the head of the filmmaker behind that